OIL BUSINESS LIQIUDITY PROBLEMS A PLUS FOR CLIMATE ACTION

With senior Australian Government politicians still questioning the degree to which human generated emissions are contributing to climate change, we have every right to be concerned about the Government's commitment to the Paris climate change agreement.

However, there is encouraging news from around the globe. A combination of individual actions, efficiency measures, and businesses prepared to jump on the renewable energy bandwagon, has reportedly seen the total value of energy generated by fossil fuels plummeting by more than half in just 20 years.

Also, when oil prices climbed above US$70 a barrel, the industry borrowed heavily, but the subsequent price plunge has made it virtually impossible to repay those debts. A conservative estimate of industry debt of US$2.5 trillion has led Deloitte Financial Services to predict that at least 35% of the world's independent oil companies will declare bankruptcy by the end of 2016.

Last November, climate analyst, Carbon Tracker, was ridiculed by the fossil fuel industry over predictions that six of the world's largest energy companies, Royal Dutch Shell, Peabody Energy, Glencore, Coal India, and Exxon Mobil were “over-exposed” to debt.  In February, Peabody declared itself bankrupt, and is unlikely to be the last.

The fossil fuel industry is facing serious liquidity problems, and there is little doubt that the profitability crisis facing many companies is the result of an inevitable transition to renewables.

Texas A&M University researchers claim that by 2050 fossil fuels and nuclear power will become obsolete as viable energy sources due to increasing costs. More importantly, they claim that 50% of remaining fossil fuels must remain unburned if global temperature rises are to remain below 2ºC, and to achieve this, and avoid catastrophic climate change, 50% of the world's energy must come from renewable sources by 2028.

That is the challenge we face.

On the positive side solar power production has reportedly doubled every year for the past 20 years, while with every doubling of photo voltaic infrastructure there has been a 22% drop in cost. Amazingly, simple economics may be the world's saviour, and hopefully our Government will play its part.

-          John Edwards

 This  post originally appeared in the VOICES FOR THE EARTH column in The Daily Examiner on 2nd May, 2016.

CAN THE NSW GOVERNMENT BE TRUSTED TO KEEP THE NSW NORTHERN RIVERS GASFIELD FREE?

Late in 2015 the NSW Government reached agreement with gas-mining company Metgasco about a buy-back of its petroleum exploration licences in the Northern Rivers of NSW.  This followed years of community protests against coal seam gas and unconventional gas mining with major campaigns at Glenugie near Grafton, Doubtful Creek near Kyogle and which culminated in massive protest at Bentley close to Casino and Lismore.

The agreement with Metgasco effectively meant that the Northern Rivers became gasfield free.  This was what community groups like Gasfield Free Northern Rivers, Lock the Gate and the Knitting Nannas Against Gas had been aiming for in the Northern Rivers area.  And local National Party MPs like Chris Gulaptis, Member for Clarence, assured the community that the area indeed was and would continue to be gasfield free.

However, since then community members have learnt about a number of developments that cast considerable doubt on these assurances.

On February 9 2016 the Lismore-based paper The Northern Star published a story about NSW Mining Minister Anthony Roberts stating that the NSW Government intended to unlock new coal seam gas reserves "to local mining companies that will supply into local markets rather than export".

In support of this plan Minister Roberts claimed that NSW last year had come within a hair's breadth of "catastrophic" gas shortages because of a lack of a local supply.

This is a repetition of the spurious arguments that were used by the Government during the Northern Rivers community campaign to declare this part of the state gasfield free.  It completely ignored the fact that NSW had a very plentiful supply of gas from interstate and there was no danger of gas shortages, catastrophic or otherwise.

The next development which caused concern was the release of the NSW Department of Planning's Regional Plan.The Draft North Coast Regional Plan which was put on exhibition in March is the "proposed blueprint" for the next 20 years.  According to the foreword it "outlines a vision, goals and actions that focus on a sustainable future for the region as it grows that protects the environment, builds a prosperous community and offers attractive lifestyle choices for residents." 

The Draft Plan also states clearly that gas mining in the Clarence -Moreton Basin is still on the agenda.  "The North Coast also includes areas of the Clarence-Moreton Basin, which has potential coal seam gas resources that may be able to support the development and growth of new industries and provide economic benefits for the region..." It also states that the NSW Department of Industry is mapping coal and coal seam gas resources in the region.

If the two developments above were insufficient to cause community concern about the government's intentions, early in May the community learned of another indication of the government's desire to restart gas-mining in the region. Marketing material, prepared by NSW Trade and Investment bureaucrats, was presented in March to a mining conference in Toronto attended by thousands of mining investors from more than 100 countries.

Investors were told that a 16,000 sq km area of the Northern Rivers, the Clarence-Moreton Basin, "has very good petroleum potential" and that almost all the wells drilled have yielded gas or oil.

Was the marketing promotion a "bureaucratic error" as claimed by some local politicians? In the very unlikely event that it was, it indicates that the Government is performing very poorly in communicating its policies to the bureaucracy.  Presumably the inclusion of gas-mining in the Draft Regional Plan was also a "bureaucratic error".

The Northern Rivers community has good reason to be very suspicious of the Baird Government's commitment to a gasfield free Northern Rivers.

LAND CLEARING AND BIODIVERSITY IN NSW

The first of the NSW Government’s biodiversity reforms went on public exhibition on May 3 for eight weeks.  These proposed new laws are to replace other legislation including the Native Vegetation Act 2003 and the Threatened Species Conservation Act 1995.

 

The draft Biodiversity Conservation Bill and the draft Local Land Services Amendment Bill are the first parts of the reform package to be released.

The stated purpose of the reforms is to “cut red tape, facilitate ecologically sustainable development and conserve biodiversity across NSW”.  

The cutting of red tape purpose is the result of the National Party promise to farmers that they would repeal the Native Vegetation Act.  The new rules will specify a system of self-regulation for farmers wanting to clear land – a system that the Government says will provide them with greater flexibility. 

Self-regulation is a mantra of government in the 21^st century.  It may be inspired by the desire to cut red tape for consumers as well as cutting costs for government agencies or, as a cynic may suspect, to allow “open slather” where there is usually very little checking by government agencies of whether the letter or spirit of the law is being met. Whatever the Government’s motive, self-regulation is wide-open to abuse.

Whether the new system will “facilitate ecologically sustainable development and conserve biodiversity” is very doubtful. 

Conservationists believe that the Government’s proposed changes to land clearing will endanger more species and lead to further carbon emissions.

There is concern that there will be increased clearing. We could see a similar devastation of native vegetation to that occurring in Queensland following the Newman Government’s weakened clearing laws. Almost 300,000 hectares of bushland were cleared there in 2013-14.

According to NSW Environment Minister Mark Speakman this won’t happen because there will be “a wider range of checks and balances in place to make sure that what we might have seen in Queensland does not happen in NSW.”

The checks and balances will need to be carefully designed and properly funded if the new rules are not to lead to broadscale land clearing.

-          Leonie Blain

This  post originally appeared in the VOICES FOR THE EARTH column in The Daily Examiner on 9th May, 2016.